On March 30th, a Connecticut Federal court found that the FLSA’s “Outside Salesman” exemption did not apply to Pharmaceutical Sales Representatives. In issuing its ruling the court resisted the temptation to concede to legal fictions created by other courts in order to justify withholding overtime compensation. Without getting too technical, at the core of the ruling is the fact that Pharmaceutical Sale Representatives do not actually sell anything. In fact, federal and state law precludes them from making the very sales that would make them exempt. Rather, their role is to inform health care providers about the benefits of a given drug and to attempt to convince those professionals to write prescriptions. In order to be exempt under the FLSA as an outside salesman, you first have to actually sell something. This decision means that thousands of Pharmaceutical Sales Representatives (sometimes referred to as “Drug Reps” or “Drug Representatives”) may be entitled to countless hours of previously unpaid overtime compensation. Overtime compensation is calculated as one and a half times your regular rate of pay for those hours beyond forty worked in a single week. Typically, Drug Reps make a good living, but the work requires long hours, often well beyond forty in a single week. Thus, it is not a stretch to think individual Drug Reps might be able to recover tens of thousands dollars for unpaid overtime accrued over just a couple of years.
For those readers interested in reading the court’s 3/30/09 opinion in Kuzinski v. Schering Corp., it is currently available at 2009 U.S. Dist. LEXIS 25702.